Let's build an ecosystem around hyperlocal bloggers

There is a future for news – a sustainable and once-again profitable future with the prospect of expanding and improving journalism by taking it deeper into our communities with increased relevance, engagement, accountability and efficiency.

A team of business analysts and journalists in the City University of New York Graduate School of Journalism's New Business Models for News Project, which I direct, tried to answer the hard questions that have been asked since news organisations began suffering business challenges – and more recently, bankruptcy. Namely: what happens to journalism in a city when its last daily newspaper dies?

Or to put it another way: will there be a market demand for journalism? Can the market meet this demand? And who will pay for the journalism we need? These are business questions and so we sought business answers in research with a wide range of news companies.

The most startling and hopeful number we found is this: some hyperlocal bloggers, serving markets of about 50,000 people, are bringing in up to $200,000 a year in advertising. These are sustainable businesses and we believe they are critical elements of the future of local news – a future no longer controlled by a single newspaper but instead by an ecosystem made up of many players with varying motives, means and models, working collaboratively in networks.

We see the faint beginnings of this ecosystem today in the 10,000 hyperlocal bloggers who operate in the US, according to the hyperlocal network outside.in. They are being joined, almost daily it seems, by unemployed professional journalists intent on continuing to report and eating while doing so – for example the New Jersey Newsroom, the Ann Arbor Chronicle, and My Football Writer in Norwich. At CUNY, we surveyed more than 100 of these local-site proprietors and some are becoming profitable.

Keep in mind that few, if any, of these bloggers and journalists have experience in business, advertising or sales. So in our project, we suggest that there are many ways to optimise their businesses. Start by improving the products and services they offer to local traders. Then add the potential of regional advertising that will need outlets when the metro paper dies, as well as smaller networks made up of a few towns or built around interests such as parenting or sports. We even see potential for e-commerce revenue, following the example of the Telegraph, which sells hangers and hats, and now Utah's Salt Lake Tribune, which has begun selling homes.

Bottom line: after three years, we project that a blogger could hire editorial staff and advertising help – citizen salespeople who help support the citizen journalists – and net $148,000 out of $332,000 revenue. That's a conservative estimate when you consider that a community weekly paper in such a town probably earns between $2m-$5m.

We still see a role for a news organisation – the successor to the newspaper newsroom – that covers city-wide stories, provides the best reporting that will remain the lifeblood of local journalism, and works collaboratively with many in the community. It is the largest member of the ecosystem but with a staff of 100 instead of 1,000 – and without the cost of printing and distribution – it is much smaller than the old newspaper and that is what makes it profitable. In the US, we have seen not-for-profit versions of this new news organisation rise in San Diego, Minneapolis and New Haven.

There are more contributors to the metro news ecosystem: technology and sales support organisations that enable these players to operate as part of ad and content networks; publicly supported and not-for-profit entities (public media, an individual reporter supported by pledges using services such as spot.us, or a foundation-supported organisation); transparency of government actions and information (which we believe is critical to enabling any citizen to become a watchdog); national networks and the immeasurable but invaluable force of volunteers who contribute to public knowledge, because they care.

Adding this all together, our models projected editorial staff of 277, equivalent to a current newsroom in our hypothetical city of 5 million but now highly distributed among many new entities. We forecast total revenue totalling 10%-15% of that of the newspaper – which is about what most papers earn online today. At that level, we see sustainable journalism of scale but we also see great potential for growth, especially if journalists learn to take advantage of the social engagement the internet enables.

Ours is only one optimistic vision. There is no way to tell if we are right until journalists, business people, advertisers, technologists and citizens invest in the future instead of merely trying to protect their past. The incumbents are talking about building pay walls. Google has just offered its Checkout payment system to enable micropayments – which may be less of a rescue for papers than for the rare unpopular Google feature. Meanwhile, the entrepreneurs we interviewed are building new news companies for the new ecosystem.